The local search market is a rapidly growing and changing area of search marketing. Local consumers are both more elusive and more connected than ever before and local business owners need to keep step with their customers’ online behavior in order to remain relevant and prominent in their local market.

Smart business owners have already embraced the Internet and mobile as powerful ways to attract new customers, and the sheer number of innovative local sites, services and LBS apps that have sprung up to capture a slice of this market is staggering.

Customer Opinions Lie At The Heart Of Many New Services

At the heart of many of these new services lies three core components:

General Business Information

Local Deals, Discounts & Coupons

Customer Opinions, Recommendations & Ratings

Businesses can directly control the first two parts of this local trinity, albeit it may be harder than it should be! But when it comes to customers’ opinions and the public sharing of those opinions with a huge online audience, there is little businesses can do – except make damn sure their service is as good as it can be and to engage with their customers more than ever before.

Online Reviews: Reach More People, Convert More Customers

Even though local businesses don’t have direct control over what their users write about them, they can influence the conversation and turn a potential threat into a great marketing asset.

Many local search engines, local directories and local-social sites use customer reviews as a factor for how prominently they show a business in their results. Both the volume of reviews and the sentiment of those reviews have an effect on how visible a business is and businesses that can successfully encourage their users to leave positive reviews will benefit from reaching a wider audience.

With 70% of local consumers now using the Internet to find good local businesses, greater visibility on search engines and local directories could put a local business in front of thousands of potential customers each month.

The other upshot of positive reviews is greater Conversion. About 49% of local consumers are more likely to use a local business having read a positive online review.

Understanding Local Reviews & Turning Them To Your Advantage

Between October 2010 and April 2011, BrightLocal conducted their annual Local Consumer Review Survey which studied the attitudes, consumption and approach of local customers towards online reviews and personal recommendations.

The following set of charts and analysis represent the main findings of this survey. It also provides a set of clear actions and a working guide for how local business owners can embrace online reviews and turn them to their advantage.

1. Local Consumers Moving Online & Embracing ‘Tell All’ Culture

70% of local consumers have used the internet to find a local business

In the last 12 months, 70% of survey respondents (i.e. local consumers) claimed to have searched online to find a good local business.

Restaurants, hotels and shops are the most searched for types of business, but results show that local consumers search for a huge variety of local businesses online – from Dry Cleaners to Caterers.

Tip for local business owners:

Improve your online prominence by ensuring that your business is listed on all key local search engines (e.g. Google Places) and the leading online business directories (e.g. Yelp & Superpages).

(*Disclaimer: So there is no confusion – As I run BrightLocal.com, I am admittedly a little biased when it comes to our tools, but I will also be promoting tools from other companies which i think rock!)

67% of local consumers have read online reviews of local businesses

Nearly as many local consumers have consulted (i.e. read) online reviews as have searched online for information about local business. The two activities are joined at the hip and increasingly consumers rely on the shared experiences of others to help them make their purchasing decisions.

Tip for local business owners:

Go online and see what reviews have been left about your business – are they positive or negative? Also, have a look at how many reviews your customers have and how competitive your niche is.

69% of local consumers trust online reviews as much as personal recommendations.

More and more people (69%) are happy to trust the opinions of online strangers as much as recommendations from people they know. This percentage jumps among younger consumers – with 79% of 16-34 year old trusting online reviews.

Tip for local business owners:

You can keep track of your online reviews by using an free and easy to use online service likeYext.com.

2. Online Reviews Influence Choices Local Consumers Make

49% of local consumers are more likely to use a business that has positive reviews.

The nature of the sentiment within online reviews has significant impact on the choices which local consumers make, as 49% of consumers are more likely to use a local business after reading positive reviews; but 57% of consumers will avoid a local business that has negative online reviews.

Tip for local business owners:

You can’t ignore the grumblings of unhappy customers as they can come back to haunt you like never before. Instead, you need to proactively and publicly respond to negative reviews.

You’ll find that you can quickly turn a bad situation into a positive one by showing that you’re alert to customer needs and working hard to provide a good service. You should also work to encourage your most loyal and happy customers to go out and spread the word.

Local consumers like to read up to 10 reviews before making a decision about which local business to use.

Some consumers are happy to make a decision having read just 1 review, but most (73%) consumers like to read up to10 reviews before choosing a local business to use.

Tip for local business owners:

Actively work to grow your reviews each month. Give your customers new reasons to promote your business and aim to add a few new reviews each month. But don’t stop when you reach 10 reviews – the more reviews the better! Think how well you’d standout if you had 50 reviews and your competitors had just 5!

51% of consumers cite ‘Reliability’ as the most important trait in choosing a local business.

Doctors, dentists, tradesmen and hotels are the business types for whom ‘reputation’ is most important. A bad ‘rep’ can sink a business! And when it comes to the nature of that reputation, it is ‘Reliability’ that local consumers look for most in the businesses they choose to use.

Tip for local business owners:

Another way for you to generate more reviews directly from your website is to embed a (free) review button such ReviewBiz (by BrightLocal).

3. Motivations & Methods For Recommending A Local Business

Reliability, Friendliness & Value for Money are the 3 most important business traits that lead recommendation.

It won’t surprise many local business owners to learn that even in the digital age, customers still want the same things from the local businesses they use. For a customer to recommend a business to someone they know it needs to be Reliable, Friendly and offer good Value for Money.

Focus on providing the best service you can at a fair price and the recommendations you earn will bring in new customers. No tricks, no gimmicks, just good service.

40% of customers would be more likely to recommend a business that has a good special offer.

This finding speaks for itself!

Tip for local business owners:

You can increase the volume of recommendations further by always offering a deal or special offer. Consider what you can offer that will appeal to both existing customers and new customers; or run 2 deals concurrently – 1 for each set of customers.

Test different deals out and see which gets the best response. Keep it fresh by changing it regularly and promote it well to make ensure that your customers know about it – so they can recommend it and your business!

27% of consumers have recommended a local business on Facebook.

Word of mouth remains the most popular method for recommending a business, but in the last 12 months 27% of local consumers have recommended a local business via Facebook. This figure rises to 32% in consumers aged 16-34.

Tip for local business owners:

With the growing power of Facebook, make sure that you have a Facebook Places listing. Keep the listing active and tell your younger customers about it and ask them to ‘like’ you.

If you run an ‘Lifestyle’ business (e.g. a cafe, pub, restaurant) then use Facebook Deals to incentive your customers to ‘check in’ at your business and reward them for their loyalty. Get them to bring their friends along by offering an awesome group deal.

40% of customers would be more likely to recommend a local business if they benefited directly from it.

Incentivizing your existing customers to attract new customers is a common marketing practice in certain industries and business types – especially for online businesses.

It’s not widely used in the local business market but local customers are very open to it, as 40% of local customers would be more likely to promote a local business if they could get a bigger discount or free service for themselves.

Tip for local business owners:

Setting up a ‘customer-get-customer’ system can be quick and easy. You can create some loyalty cards that have a unique special offer on them (e.g. a free coffee, 1/2 price massage, First consultation FREE).

Start off small and hand pick 10 loyal customers and give each of them 20 of these cards and mark each card with the customer’s name. Keep hold of any cards that get redeemed and after 1-2 weeks, you can count the cards and reward your loyal customers appropriately. If the scheme works well then invite more customers to take part and expand it from there.

5 Clear Action Points For Local Business Owners

Ensure that your business has an optimized listing on Google Places, Yahoo Local, Bing Local and the top 20 local directories. Also, don’t forget Facebook – go and claim/register your Facebook Place now.

Actively grow the number of positive online reviews you have by encouraging your most loyal customers to go online and write reviews about your business.

Focus on the core values of good customer service – Reliability, Friendliness & Good Value.

Make sure you always have a good value special offer on – be creative with what you offer but ensure that it represents real value to existing customers and new customers.

Introduce a simple, trackable system that incentives your customers to recommend and promote your business by offering them a greater discount or free service in return.

If you would like to see the full findings of the Local Consumer Review Survey please visit the BrightLocal Research Portal. The survey results are divided into three parts – all of which can be found here, along with other recent research.

Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.